Charging Almost $200 for a Bottle of Pills Worth $6

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Bloomberg’s Robert Langreth, David Ingold and Jackie Gu take a fascinatingly detailed look at the “secret drug pricing system” that generates millions of dollars for pharmacy benefit managers, including one example in which CVS Health billed an Iowa county $198.22 for a bottle of generic antipsychotic pills — or about $192 more than it reimbursed a pharmacy for the medication.

Bloomberg’s reporters looked at the prices of 90 top generic drugs used by Medicaid managed-care plans. They found dozens of examples of large differences between what pharmacy benefit managers charge for a drug and what they reimburse pharmacies — and evidence that those spreads are growing.

“For many widely used generic drugs, state insurance plans are collectively paying millions of dollars in fees to private companies,” they write. “For the 90 drugs analyzed, which includes more than 500 dosages and formulations, PBMs and pharmacies siphoned off $1.3 billion of the $4.2 billion Medicaid insurers spent on the drugs in 2017.”

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.